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spk07: Good morning, and welcome to the Sonic Automotive third quarter 2022 earnings conference call. This conference call is being recorded today, Thursday, October 27, 2022. Presentation materials, which accompany management's discussion on the conference call, can be accessed at the company's website at ir.sonicautomotive.com. At this time, I would like to refer to the Safe Harbor Statement under the Private Securities and Litigation Reform Act of 1995. During this conference call, management may discuss financial projections, information, or expectations about the company's products or market or otherwise make statements about the future. Such statements are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These risks and uncertainties are detailed in the company's findings from the Securities and Exchange Commission. In addition, management may discuss certain non-GAAP financial measures as defined in the Securities and Exchange Commission. Please refer to the non-GAAP reconciliation tables and the company's current record on Form 8K filed with the Securities and Exchange Commission earlier today. I would now like to introduce Mr. David Smith, Chairman and Chief Executive Officer of Sonic Automotive. Mr. Smith, you may begin your conference.
spk05: Thank you very much, and good morning, everyone. Welcome to Sonic Automotive's third quarter 2022 earnings call. As she said, I'm David Smith, the company's chairman and CEO. Joining me on today's call is our president, Mr. Jeff Dyke, our CFO, Mr. Heath Bird, our Echo Park chief operating officer, Mr. Tim Keene, our chief digital retail officer, Mr. Steve Whitman, and our Vice President of Investor Relations, Mr. Danny Weiland. I'd like to begin by sincerely thanking all of our amazing teammates, customers, manufacturer, and vendor partners for helping Sonic Automotive achieve another period of record-breaking financial performance, including record third quarter revenues, gross profit, net income, and earnings per share. Highlights from our quarterly results include record third quarter revenues of $3.4 billion, which is up 12% year over year. SAC also posted record third quarter gross profit of $581 million, up 23% year over year. This drove us to achieve record third quarter net income of $87 million for $2.23 per diluted share. During the third quarter, we continued to see strong new vehicle pricing, consistent consumer demand for new vehicles, and sustained growth in our parts and service business. While we experienced lower new vehicle sales volume on a year-over-year basis due to ongoing supply chain constraints and limited vehicle inventory, we also continued to see strong new vehicle GPU and a sustained pre-order bank. Our used vehicle volume was consistent with industry trends year over year, reflecting ongoing affordability concerns as a result of near record high used car prices and a rising interest rate environment. I'm happy to say that since quarter end, though, we have continued to see stability in our overall business despite microeconomic headwinds and concerns around rising interest rates heightened inflation, and ongoing global supply chain constraints. Our financial results reported earlier today demonstrate the fundamental strength of our diversified automotive model, as well as our team's unwavering commitment to creating long-term value for our guests, manufacturer partners, and stockholders. While we remain optimistic about our long-term prospects and growth trajectory, we realize that we are not operating in a vacuum. As I mentioned on our last earnings call, this is not the first time Sonic has had to navigate through adverse economic cycles. Our team is well aware of the current challenges we are all facing and is monitoring our operations daily to adjust for any near-term obstacles related to the overall industry and economic environment while maintaining a long-term strategic view for our business. As such, we remain adamant in maintaining our strong balance sheet position which we consider to be essential in today's world. Our team remains very focused on maintaining high levels of profitability, generating strong cash flows, and collectively managing our cost structure. To this end, we are continuing to take a strategic, measured approach to our expansion plans, both with our franchise dealerships as well as with Echo Park. As we balance our commitment to long-term growth with our current priority to maintain a strong liquidity position in light of uncertain macroeconomic outlook. Turning now to our franchise dealership segment results, third quarter 2022 revenues were $2.8 billion, up 18% from the prior year period. Segment income was $146 million, up 1% year over year. And segment adjusted EBITDA was $198 million, up 10%. from the prior year. On a same-store basis, franchise dealership revenues were up 3% from the prior year, while gross profit was up 5%. Parts and service gross profit increased by 10% year over year, with same-store customer pay gross profit up 12% and same-store warranty gross profit up 7%. Same-store F&I gross profit was down 5% on lower unit sales volume despite an all-time record quarterly franchise dealership segment F&I gross profit per retail unit of $2,473, which was up 7% from prior year. Despite persistent new vehicle demand, sales volumes during the quarter continued to be impacted by ongoing vehicle production constraints. Same-store retail new vehicle unit sales volume was down 6%, even as same-store retail vehicle gross profit per unit was up 28% year-over-year to $6,571. Same-store retail used vehicle unit sales volume was down 12%, while same-store retail used vehicle gross profit per unit was lowered by 9% year-over-year to $1,669. As of September 30th, our franchise dealership segment had approximately 18-day supply of new vehicle inventory unchanged from the second quarter. Production continues to improve slowly while demand for new vehicles remains strong, which continues to drive strong new vehicle GPU. Our franchise dealership segment had approximately 31 days supply of used vehicle inventory, again, unchanged from the second quarter. Given ongoing new vehicle inventory constraints, recent declines in wholesale market pricing, and our current macroeconomic outlook, We continue to be disciplined in managing our used vehicle inventory, volume, and pricing. Now let's turn to Echo Park. For the third quarter of 2022, we reported revenues of $608 million, down 8% from the prior year. Despite this, we reported record third quarter Echo Park gross profit of $49 million, up 88% year over year. Echo Park retail sales volume for the quarter was 15,422 units, down 27% for the prior year, as we continue to focus on executing our strategic adjustment to include five-plus-year-old vehicles in Echo Park inventory. Digging a little deeper here, five-plus-year-old vehicles represented 19% of Echo Park retail used vehicle unit sales volume in the third quarter, which was up from 9% in the second quarter of 2022. And our non-auction sourcing mix grew from 25% in the second quarter to 32% of sales in the third quarter. As we expected from the third quarter, we reported Echo Park segment loss of $29.9 million compared to $34.9 million in the second quarter and $32.9 million in the prior year quarter. Echo Park reported an adjusted EBITDA loss of $21.4 million in the third quarter, an improvement from a loss of $27.9 million in the second quarter, and a loss of $28.5 million in the year-ago period. This sequential improvement from the second quarter demonstrates the benefits of strategic shifts in inventory mix and sourcing that I mentioned earlier. At the end of September, our Echo Park segment had approximately 57-day supply of used vehicles. For Echo Park branded locations though, the day supply was just 40 days, excluding new locations open during the third quarter, positioning us well as we head into the fourth quarter. During the third quarter, we continued to strategically expand Echo Park's distribution network, including a new delivery center opening in Tulsa, Oklahoma, and retail hub opening near Sacramento, California. Including our new location openings during the quarter, the Echo Park brand now reaches over 50% of U.S. population, on its way to 90% of U.S. population by 2025. In addition to growing geographically, we've also continued to expand Echo Park's digital footprint with the continued success of our new e-commerce platform, which was successfully rolled out this past June to 100% of our nationwide traffic at Echopark.com. For the third quarter, omnichannel sales through our new e-commerce platform accounted for 31% of Echopark's retail unit sales volume compared to 19% in the second quarter. Further, 7% of Echopark volume during the quarter was sold end-to-end online as guests continued to utilize our enhanced omnichannel purchase experience with out-of-market buyers representing 60% of our e-commerce sales. We continue to monitor Echo Park's performance and remain confident in this segment's long-term growth prospects once the used vehicle market returns to normalized conditions in due course. In the interim, we continue to take steps to adjust our structure at Echo Park to better align with the current environment and target a return to break even EBITDA in the second quarter of 2023. We are already seeing the benefits of expanding our inventory offering to include five-plus-year-old vehicles, enabling us to reach additional customer segments, improve consumer affordability, and to source more vehicles from non-auction sources, which will improve profitability. We began to see the benefits of these actions this past quarter and expect to see further improvement in Echo Park losses during the remainder of the year. We are still in the early stages of these initiatives. Once we have further visibility on future used vehicle market conditions and the effects of the strategic adjustments we have made at Echo Park, we will provide an updated Echo Park model and guidance. As an update on our share repurchase activity, during the third quarter we bought back approximately 3.1 million shares of the company stock for approximately $151.5 million. Year-to-date, we repurchased 5.2 million shares, representing 13% of shares outstanding as of the end of 2021, for approximately $245 million. As previously reported, in July, Sonic's board of directors increased the company's share repurchase authorization by $500 million. Taking this into account with our recent repurchase activity, this results in a total of $481 million in remaining share repurchase authorization, representing over 25% of Sonic's current market cap. Now turning to our balance sheet, we ended the second quarter with $488 million in available liquidity, including $171 million in cash and full plan deposits on hand. The decrease in liquidity from the end of 2021 was driven primarily by the share repurchase activity I just mentioned. Additionally, I'm pleased to report today that our Board of Directors has approved to increase our quarterly cash dividend to $0.28 per share, payable on January 13, 2023, to all stockholders of record on December 15, 2022. Our strong sales performance, cash flow generation, and balanced capital allocation strategy continues to allow Sonic to return capital to shareholders through its quarterly dividend and share repurchases. In summary, our third quarter results reflect another quarter of record financial performance in spite of growing macroeconomic concerns. Looking forward, we will continue to advance our strategic growth plans for both our Sonic franchise dealerships and our Echo Park business, taking the necessary steps in the short term to maintain our strong balance sheet so we can continue to reach our longer-term goals while still benefiting from the strength of our diversified business models. We remain confident in reaching these goals and look forward to further revenue growth, increased profitability, and generating long-term value for our stockholders. This concludes our opening remarks, and we look forward to answering any questions you may have. Thank you very much.
spk07: Thank you. We will now begin the Q&A session. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, that's star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered. Our first question comes from John Murphy with Bank of America Merrill Lynch. John, your line is now open.
spk00: Good morning, guys. I just had a first question on inventory restocking and grosses. And because you guys have a much heavier luxury and import mix than most dealer groups, I'm just curious what you're hearing there. And it kind of sounds like domestics might be catching up a little bit faster than luxury import brands, but maybe not. I'm just trying to understand what you think is going to happen there and when we get back to normal and what that normal means.
spk04: Hey, John, it's Jeff Dyke. Yeah, the import brands in particular, and Honda in particular, obviously the day supplies are really low, three, four, five days. And we expect that to continue for the foreseeable future. The Highline brands are getting better. Mercedes, BMW, our day supply in total is growing there, not as quickly as we'd like, but certainly it's growing. I think it's going to continue to get better as we move through the first and second quarter. I think the manufacturers are doing a great job. They're busting their butts, you know, getting inventory to us, but they still have supply chain issues. Chips are still a problem. And that's, you know, going to weigh on the industry for the foreseeable future. But they supply, you know, as we look into next year, if we're sitting at 18 days today, they supply next year. We're hopeful that, you know, 25 days, I don't think it gets to 30 days, but, you know, keep our fingers crossed. because that's going to drive and will continue to drive pre-owned pricing down, and that's a big piece of the puzzle for us from an Echo Park perspective.
spk00: And, Jeff, what do you think that means for grosses? I mean, 18 to 25 days is still pretty damn tight relative to history. Does that mean grosses are still reasonably strong, or do they fade just a bit?
spk04: Yeah, you know, we're seeing just a little compression in this quarter, but not a lot. I mean, I think the grosses, you know, certainly from a pre-COVID perspective, are going to be really high. You know, if we were running $2,200, $2,300 a copy, then we're well north of $6,000 now. I mean, maybe a return to norm is in the $4,500 to $5,000 range, but I don't see that's certainly not going to happen this quarter. I don't see it happening in the first and second quarter of next year. Grosses are going to continue to remain high from a front-end perspective.
spk00: And you guys made mention of measured approach to growth, yet when I think you just kind of cited the Echo Park expansion by 2025, it didn't sound like there was much throttling back at all there. I'm just curious, particularly around Echo Park, how you think about this macro backdrop of what's going on in the used car market where it seems like it's going to be shrinking in supply for a number of years to come because we just sold so few new vehicles. that it might be challenging to grow in absolute terms, and you're really going to have to go after market share pretty heavily there. I'm just curious how you think about maybe tapping the brakes a little bit on Echo Park growth, or maybe not, and this might be a great opportunity to go after some competitors that might be flailing and not have the capital resources that you do.
spk05: This is David Smith. As it relates to Echo Park and our future expansion, we're going to I know some of our teammates here will jump in on this as well, but we're going to have a very disciplined approach to that. We're going to get back on track when we're seeing, as we mentioned, some huge progress in some of our Echo Park stores that Tim Keehan and the team have been working on and Jeff Dyke. But we're going to see that to fruition before we start rolling out a bunch of other additional locations.
spk04: Yeah, so we opened Tulsa and Sacramento in the third quarter. Great expansion for us. We're now over 50% of the market. We don't see a problem getting to 90% of the market by the end of 25. But we're not going to open any stores for the remainder of the fourth quarter, first quarter, second quarter. But we're at an average wholesale price right now down from $31,500 to just below $26,000 that we're buying in the auction lanes. We expect that to continue to drop, John. That's going to The rental car companies are out of the auction lanes. Some other competitors are struggling. So we have access to inventory. And as prices drop, Echo Park, this is a great time for us because the recession happens. It doesn't happen, but things are slowing down. And that's when Echo Park really thrives. So these prices are going to drop, I think, by the middle of next year. We'll be buying in the auction lanes maybe in the $23,000 to $24,000 range. And that's where the average monthly payment is. gets back down to where it was pre-COVID, somewhere in that $450 range. Last quarter, our average customer paid $630 with warranties and everything wrapped in. It's still too close to the new car payment. So we'll tap the brakes here for a couple of quarters, get back to really focusing on the EBIT situation at Echo Park. And what's going to create the positive EBITDA is just that average price and the monthly payment for the consumer to continue to drop. We're really excited. We had an Echo Park senior management team the other day. The team is pumped up. We see the volume coming back. Our big store in Thornton in the month of September made right at $900,000 profit. I don't think there's another single-point used car store in the country that was doing that. We sold 700 cars out of that store. We'll do over 800 cars in October. So the business for Echo Park is coming back. And we always said that it would. We're right on track with where we said we'd be. We'll see an improvement EBITDA. from the third quarter and the fourth quarter. We're already seeing that in October. So we feel like really exciting times as we move forward. But we're cautiously optimistic. We're going to manage our capital properly. And we'll tap the brakes here for a couple of quarters, not open any stores. And let's see what happens in the back half of next year, which will also include our thoughts on starting our branding campaign and really driving Echo Park. We really never advertised Echo Park. It's sort of a price-driven company, and so we've got that on our plate too, but we're going to be smart, wait, and we'll see what happens with the pricing in the wholesale market. I would expect that the one- to four-year-old category comes back stronger in the next couple of quarters. We probably will sell less plus five-year-old cars as a percentage, but it's certainly helping the bottom line.
spk05: Yeah, and something that, you know, Jeff mentioned yesterday. This is David. Something that Jeff mentioned there, our advertising, and, you know, Our word-of-mouth advertising really couldn't be better. It's something we're really proud of is that our guest experience is really an industry-leading five-star guest experience at Echo Park. We don't want to sacrifice that as we get back to growth. We've got some stores that are, you know, we've got some of our experienced guys, as we call them, some of our salespeople are selling north of 50 cars and delivering on that guest experience. And so we We want to make sure that we have the proper training and hiring processes as we continue to roll those stores out.
spk04: Yeah, John, another good point is prior to COVID, our average experience guide sold 25 cars a month. And we're now at about 23. And some of our stores are just being overrun, averaging 30 or 35 cars a month. So we're starting to hire experience guides again. The business is coming back, and it's a lot of fun for us. Obviously, it's been a tough year from an EBIT perspective. But we've had measured growth this year. We'll be smart about that over the next couple of quarters, and we're excited about where we stand with Echo Park, especially in comparison to a lot of the competitive set that's sitting out there with real heavy day supply and struggling in an environment like this.
spk00: Yeah, it's tough when you have 99 physical lots that you can't use. But anyway, okay, thank you so much, guys. I appreciate it. Not for you guys, your competitors.
spk04: Hey, we get it. We're watching it real close. Thank you for clarifying that. Yeah, yeah, yeah.
spk00: Definitely not you. Somebody else. I'll leave it there. Thanks, guys. Thanks, John.
spk07: Thank you, John. Our next question comes from Joe Enderlin with Stevens. Joe, your line is now open.
spk03: Hey, guys. Thanks for taking our questions.
spk02: Hey, Jeff.
spk03: Good morning. So on capital allocation, share purchase came in ahead of our expectations. Just wondering if you think we can expect some continued elevated buyback, or how are you thinking about priority here versus the M&A environment, given you're tapping the brakes on Echo Park growth?
spk05: Yeah, this is Heath Bird. As David mentioned in his opening comments, we always look at capital allocation as a balanced approach. I think we did show that one of the big buckets is returning capital to shareholders, increased the dividend by 12%, and of course, as you mentioned, the share repurchases over $5 million per year. As we look at share repurchase, we always look at when it's undervalued, and we still believe it's undervalued. We look at it from an opportunistic standpoint, balanced with the other priorities. There's not a regular scheduled cadence. It will come from us on the share we purchase, just more opportunistically as we compare to the other opportunities. And the Echo Park expansion, as Jeff and David mentioned, it is slowing a little bit, and it will be correlated with the market. So you won't have as much capital stand in the next quarter, in the first two quarters of next year. So that's going to free up opportunities for other buckets. And then lastly, M&A is one of those things that's so hard to predict because the opportunities come along sporadically. But we're in a great position to take advantage of those when they do come up. And so it's really like the share we purchase. There's no cadence that we could actually predict on that as well. It's just when they come up, we use it. And then so those are the big buckets and priorities. And of course, all of that we weigh against our liquidity and leverage. We are very comfortable where we are. in both those categories. And so we hope to stay and plan to stay in those same levels. And so that's really our balanced approach. Yeah, this is David Smith. It's interesting. Some of our peers have been saying this as well, that the prices of franchise dealerships, while still high historically, we have seen some signs that those prices are coming down. So it'll be interesting to see, especially going forward into 2023, what crisis we're going to see and what opportunities that could come across our desk. But they've got to be, you know, they've got to be extremely attractive in order to allocate capital towards acquisitions.
spk03: Got it. That's all for me. Thank you, guys.
spk01: Thank you.
spk07: Thank you, Joe. Again, as a reminder, to submit for a question, that's star 1 on your telephone keypad. Our next question comes from Raja Gupta with JP Morgan. Raja, your line is now open.
spk06: Great. Thanks for taking the question. You know, just want to follow up on the Echo Park comment, you know, from the 21 million with the Dell loss to the break even by the second quarter. I think, Jeff, you mentioned, like, volumes was a big driver. Like, could you please help us bridge that gap in a bit more detail? as to how we get from 21 to Flattish? Is it just family volumes and leverage on that? Or do you expect GPUs continuing to move higher? Any further SG&A actions that drive that? Maybe if you could help us bridge that in more detail.
spk04: Yes. Thanks for the question. The expenses from an SG&A perspective are pretty fixed at Echo Park. That's why when we hit big volumes, you see the kind of profit we got out of Thornton. You know, if you look back, you look at August, we were a little below 4,000 cars. You look at September, a little above 4,000 cars. You look at October, be a little above 5,000 cars. We expect that to continue to grow. We're going to do better in November, better in December. And it is a volume piece. You know, our big stores need to be at that 400 level in order to break even. And then once they file past that, the dollars fall to the bottom line quickly. And again, that's what you see happen. At Thornton, we believe that the prices on the wholesale market for a one to four-year-old car are going to continue to drop. Like I said earlier, the rental car companies are coming out of the lanes. Some of our competitors are having a lot of problems. So inventory is there for us. And if for some reason the wholesale prices stop dropping, we would have to take some different strategical moves in order to get to positive EBITDA. But we just don't foresee that. We've been saying this all year. We've been predicting this is what's going to happen, and it's happening just exactly as we've laid out. And we think as we move into the first quarter, we'll see continued drop. I think by the end of this year, Rajat, we're going to see $24,000 price point at the wholesale line, which is great for us. That gets us below that $500 monthly payment. And we think that that will maybe flatten out a little bit and then continue to drop a little more as we move to the latter half of last year. We get to the 7,000, 8,000 car mark. We're breaking even at Echo Park based on our expense today. But pre-COVID, our store set today, we'd be in the 12,000 to 15,000 car a month range right now based on the volumes that we had. We expect to go back there. And as those prices keep dropping, that's what's going to happen. So that's the bridge. That's how we walk to the positive EBIT. And we think right now, whether it's in the first part of the second quarter, the latter half of the second quarter, or even the first part of the third, based on how we see things moving right now in the auction lanes, that's when we'll return to positive EBIT. And we're really excited about it. It's a great opportunity. We've worked very hard on this model. We're very confident in the model. And you see a lot of other models flailing around. And it's just the strict inventory management guidelines. Sometimes we might miss out on a little volume. But at the end of the day, our gross is there. We're going to get back to positive EBIT. That's going to happen in the calendar year of 23. And we think, you know, latter half of the second quarter, first part of the third quarter is when that's going to happen.
spk05: Yeah, and this is Dave. And something just to remind investors is that, you know, prior to COVID, some of our Echo Park stores were some of our most profitable dealerships across the board. including all of our franchise stores. So it's something to remember. Jeff knows what he's talking about there when he says a return to profitability.
spk02: It's coming.
spk06: Got it. Got it. That's helpful, Culler. Maybe going back to the franchise business, and you've taken a lot of productivity action over the last couple of years. But what kind of scenario are you planning for into next year in terms of, you know, growth in the franchise business? You know, maybe the SAR environment, you know, the used car backdrop. And, you know, in that context, you know, if there is a recession in the U.S. and if GPUs do normalize sooner than expected, you know, both in used cars, where do you see SG&A to grow, stepping down for the franchise business for the company? So first of all, do you see that macro back up playing out? And if not, how should we think about it in the guidepost around SG and Intergrows next year?
spk04: Yeah, so we're still building our 23 budgets now. We're in the budget season. From a front-end perspective on new car, I think margins, maybe the back half of next year we get to $4,500, somewhere in that ballpark. Certainly not in the first half. It's going to be $6,000, $5,500, $5,300, somewhere in there. We're going to have more new car volume next year just because the supply is going to be bigger. I think our used car business will be real solid, just real strict inventory management. Our gross will be there. It'll be solid. Maybe on a PUR basis, we step back a little bit in F&I, but not a lot. I mean, if it's $25 a car or something of that nature, but the overall gross for F&I is going to grow just because the volume will grow. And then our fixed operations business is on fire. We're growing that each quarter. We had a record quarter, all-time quarter last quarter, and that's going to continue to be good. So as I'm looking at next year, from a gross perspective, it looks a lot like this year to us in total gross dollars. I think that maybe we're up a little bit, I think, in our latest budget. We had maybe $12 million more in gross in our budget than we did this year based on how we think this year will end. But it's going to look a lot like this year from a gross perspective. And then Heath's got some comments on SG&A.
spk05: Yeah, I mean, I agree with Jeff. The total gross dollars are going to look very similar, nothing clearly that we can see that would change it, especially down to the downside. It's just going to come from different areas. Fix is going to pick up. We're seeing warranty for the first time in years picking up as well. And so I agree with him on the gross side. On the SG&A, You know, we'll be maintaining the same kind of expense reductions that we achieved from the pandemic. We also have automations and online activity that will help an overall expense spend and improve efficiencies. But we are going to have some investments in technology and other areas for the future that is going to add to that spend. And so, you could probably see a slight uptick and a percent of growth in SG&A. Nothing that significant, but I do believe we're going to have some things we're doing for the future that could impact that and make it grow up just a little bit.
spk04: From an IT perspective. Yeah.
spk06: And the total gross dollar comments, you know, flat next year, you know, the gross profit dollars just for the franchise business is what you're referring to or as the overall company?
spk04: Yeah, yeah, yeah. Just the franchise business. Including Echo Park. I'm sorry. I thought that's what your question was on. Echo Park's gross will be significantly better.
spk06: Yeah, yeah, yeah. No, the reason I ask that is because you take that into account, you know, maybe in the comments on H&A and if Echo Park does come out to be better than break-even for the full year, And that should mean you should relatively grow your earnings per share next year with a buyback, right? Is that what?
spk05: You're on it. That's how we see it.
spk06: Okay. Great. Thanks for the call.
spk05: Thank you.
spk01: Thank you.
spk07: Thank you. As there are no more questions in queue, I will pass the conference back over to CEO David Smith for any additional or closing remarks.
spk05: Great. Thank you very much. And thank you, everyone, for joining us on the call today. Have a great day. Thank you.
spk01: Thank you.
spk07: This concludes today's Sonic Automotive Third Quarter 2022 Earnings Conference Call. Thank you for your participation. You may now disconnect your line.
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